Assess whether HMDA data can be relied on for the exam (d71887)

Situation

A CRA PE that called the assessment area too narrow put manufactured-housing dealer overlay notes in front of fair-lending officer in a manufactured-housing lender with dealer-originated files. This Fair Lending / Redlining and HMDA Data close is HMDA data can be relied on from manufactured-housing dealer overlay notes, and the live options are Remove access or reverse the item, Temporary compensating control, Approve a documented exception.

Decision

Fair-lending officer in a manufactured-housing lender with dealer-originated files must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using manufactured-housing dealer overlay notes after a CRA PE that called the assessment area too narrow.

Hypotheses to test

• A CRA PE that called the assessment area too narrow is noise around an already-controlled Redlining and HMDA Data process in a manufactured-housing lender with dealer-originated files, given manufactured-housing dealer overlay notes.
• A CRA PE that called the assessment area too narrow is the event in manufactured-housing dealer overlay notes that forces Remove access or reverse the item for fair-lending officer under Fair Lending.
• Manufactured-housing dealer overlay notes shows a one-file miss after a CRA PE that called the assessment area too narrow, not a Redlining and HMDA Data program failure.
• Manufactured-housing dealer overlay notes cannot decide HMDA data can be relied on yet after a CRA PE that called the assessment area too narrow; hold is the only Fair Lending close a manufactured-housing lender with dealer-originated files can defend.

Analysis required

• Check HMDA coding and underwriting policy against HMDA data can be relied on.
• Compare manufactured-housing dealer overlay notes to similarly situated files, second-review notes, and reason codes after a CRA PE that called the assessment area too narrow.
• Flag any disparate-impact table fair-lending officer cannot explain from manufactured-housing dealer overlay notes.
• For this Fair Lending Redlining and HMDA Data file, read manufactured-housing dealer overlay notes against a CRA PE that called the assessment area too narrow and write the one fact that would move HMDA data can be relied on for fair-lending officer.

Recommendation